The federal system of rating U.S. nursing homes is based on "incomplete information that can seriously mislead consumers, investors and others," The New York Times reports. The five-star system that Medicare uses to judge elder-care facilities is based largely on unverified, self-reported data, according to the report.

Additionally, the system -- described as the "gold standard" for consumers, the insurance industry and investors -- does not account for state enforcement actions or consumer complaints, according to the report. Nor, it seems, does the rating system incorporate the federal quality watch list.

"Of more than 50 nursing homes on a federal watch list for quality, nearly two-thirds hold four- or five-star ratings for their staff levels and quality statistics," the report states.